Government rationale for tendering Fleet Solid Support Ships overseas criticised

Former shipyard worker turned MP for Glasgow North East Paul Sweeney has criticised the Government for failing to restrict the tendering for Fleet Solid Support Ships to the UK.

During a recent debate on UK sovereign capability, All-Party Parliamentary Group for Shipbuilding & Ship Repair Vice-Chair Paul Sweeney pointed out that despite claims to the contrary from some corners, the UK was well within its rights to protect this tendering process from international competition:

“In the context of major shipyard closures and significant downsizing, whether that is at Rosyth or Appledore, it is bizarre that the Government are quite happy to tender contracts overseas in international open competition. Under article 346 of the treaty on the functioning of the European Union, the Government could quite easily designate the industry as UK protected. It is entirely at their discretion. Any notion that their hands are tied is bogus.

They could do that, smooth the production cycles and build a firm and stable footprint for UK shipyards, which would enable them to get match fit and then go out into the world and compete effectively for other orders. That is exactly what they do in Italy with Fincantieri, and what they do in France with DCNS. It is exactly what happens in Germany.

I do not understand why other European Union member states can achieve the same objectives much more effectively than us, but we are so holier than thou that it hurts when it comes to the zealous application of these EU rules and we seem to undermine our own industrial base and our prosperity as a result, meaning that communities are broken and skills are lost. Ultimately, we undermine our objective of building a more resilient and effective industrial base to serve our defence industry and, potentially, commercial spin-offs.”

“For the purposes of this Convention, “warship” means a ship belonging to the armed forces of a State bearing the external marks distinguishing such ships of its nationality, under the command of an officer duly commissioned by the government of the State and whose name appears in the appropriate service list or its equivalent, and manned by a crew which is under regular armed forces discipline.”

However, the National Shipbuilding Strategy defines warships (some would say incorrectly) as solely destroyers, frigates and aircraft carriers. This was also highlighted during the debate in this exchange, prompted by Stuart Andrew, Minister for Defence Procurement, saying the following:

“It is not a warship by definition, for the simple reason that the definition is based on the UK’s requirement to retain the ability to design, build and integrate frigates, destroyers and aircraft carriers for reasons of national security, ensuring that the complex nature of the construct is an important part of it from the very beginning. We will continue to have this argument—unions are coming to meet me very soon to discuss it.”

Sweeney responded:

“The Minister’s last remark about the need to maintain the UK’s sovereign ​capability to build complex warships being arbitrarily restricted to frigates, destroyers and aircraft carriers, the only reason we can build those ships in the UK today is that the last Labour Government placed an order for an auxiliary ship, the RFA Wave Ruler, at Govan shipyard in 1999, which enabled that yard to continue in operation.

Also, there are five River class batch 2 patrol vessels being built at Govan to sustain production there until the Type 26 kicks in. By utilising those less complex, but none the less complex, warships to smooth the build cycle, we can retain the skills, infrastructure and critical mass we need to build complex warships including frigates, destroyers and aircraft carriers.

We must look beyond that arbitrary restriction and maximise the purchasing power of the Ministry of Defence to deliver UK sovereign capability in the long term. We should broaden our horizons.”

According to a briefing paper in the House of Commons library, the programme is currently in the Assessment Phase with the competition expected to be formally launched towards the end of 2018 and a contract signed in 2020. The MoD says the contract will be for two ships with an option for a third. The briefing paper states:

“The Government intends to compete the contract internationally. Labour, the SNP and the shipbuilding trade unions argue the contract should be restricted to UK shipyards to support the shipbuilding industry, secure jobs and retain skills. They argue the proposed ships are ‘warships’ and as such, the Government can use the Article 346 exemption to exclude the contract from EU procurement rules on national security grounds.”

Two major unions, GMB and the Confederation of Shipbuilding and Engineering Unions (CSEU), have published reports outlining why they believe the ships should be classified as warships and why they should be competed domestically. The Unions arguments can be summarised as:

The FSS should be seen as warships. They are armed and take part in counter-piracy and counter-narcotic missions;

The Government’s commitment to revitalising domestic naval shipbuilding (as espoused in the National Shipbuilding Strategy) will only be achievable with a steady stream of orders;

Building the FSS in the UK will help protect the UK shipbuilding industry, protect jobs and retain skills: GMB estimates up to 6,500 jobs could be created or secured, including 1,805 shipyard jobs;

Rosyth shipyard will have a gap between the completion of HMS Prince of Wales (the second aircraft carrier) in 2019 and the expected refit of HMS Queen Elizabeth (the first aircraft carrier) in 2030, and FSS work could keep the shipyard operational in between these dates;

The UK will financially benefit from returns to the Treasury in the form of taxes and national insurance contributions and lower welfare payments: GMB estimates £285m of the estimated £1bn contract could be returned to taxpayers this way; CSEU estimates 20% of the contract cost could be returned to the Treasury;

The Government should factor in the revenue that could be returned to the Treasury when scoring bids between domestic suppliers and foreign competitors;

There isn’t a level playing field as, the CSEU argues, “many foreign yards are either state owned, or receive significant direct or indirect subsidy… UK yards do not benefit in this way and are therefore at an unfair disadvantage.”

The TUC has also assessed the Article 346 exemption argument and argues the Government “has the sole right to determine” what its essential national security interests are. The TUC claims “other European nations have used the exemption to place orders for similar support ships with their own shipyards since the Directive was introduced.”

December this year will see the formal issue of documentation inviting bids for the design and build contract and in 2020, the contract for design and build is to be awarded.

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Poss solution the scottish govt could guarantee to pay the difference between the best price from overseas and the best price from scotland. Money where his mouth is ?

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Sorry about that automatically assumed he was from snp rather than labour. Money where snp mouth is ?

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11 months ago

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Expat

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Perhaps shipyard workers should buy British goods irrespective of the price to ensure the government money they get stays in the UK. I bet Mr Sweeny drives a foreign car, has foreign appliances in his kitchen and a Samsung TV from Korea. I also suspect he of an age when he could have bought British but went for foreign manufactured goods.

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11 months ago

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Darren

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When could he have bought British? What year do you think?

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11 months ago

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Darren

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The thing is Expat. The UK Gov is the paymaster who gets the tax receipts back!

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11 months ago

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Steve Taylor

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The Scottish Government has no money apart from that which Westminster gives it.

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11 months ago

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Cam Hunter

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I’m Scottish and I hate the Scottish government, but are you a retard? If Scotland got to keep all of the SCOTTISH oil revenue/ Tax then we would be like Norway with billions to spare….

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11 months ago

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Martin

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‘Anti Scottish bigotry’ Have you ever been to Scotland ? Do you speak with an English accent ? Cam Hunter. Google ‘Barnet formula’

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11 months ago

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Cam Hunter

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Well we should keep rosyth working on big ships! It has the facilities there now and we might lose them if not!…Build the ships like we did the carriers, from yards around the uk, giving well needed work to our almost extinct ship building industry…..

They are great looking ships, I wonder if the Albion class replacements could be based of these ships hulls….

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11 months ago

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DRS

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Building the ships in blocks and across the UK is a good way to go, keeps facilities going and spreads the investment. Build 3 rather than 2. Maybe we can even save Appledore with this if we can bring that decision forward. The stipulation should definitely be build in the UK. Can be an international competition but has to be to build in the UK. Lets build capacity if there isn’t enough. ultimately what we need is a 10-15 year roadmap of ship building that is committed to and revised every 5 years so that builders can make investments and… Read more »

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11 months ago

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Billythefish

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The UK Government – Treasury and FCO especially have a different agenda than the majority of the UK population and often in fact from the elected MP’s.

They are not interested in actually operating in the interest of the UK – they are internationalists.

When that fact is accepted the decisions an proclamations they come out with start to make more sense…

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11 months ago

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Daniele Mandelli

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Agreed.

Globalists.

Hence big business seemingly takes precedence over the majority in s democratic vote.

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11 months ago

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Helions

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Would be nice to obtain an overseas sale of a QE class. It would keep the Rosyth yard working. However, which nation would be in the market for one?

Cheers!

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11 months ago

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captain P Wash.

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Russia.

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11 months ago

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Billythefish

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Build a third one – split the capex between Canada/UK/Australia and share the opex throughout the lifecycle.

Have crew from all 3 countries operate it and base it in the Pacific.

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11 months ago

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Helions

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Not a bad idea. Perhaps the Kiwis could contribute.

Cheers!

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11 months ago

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DRS

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Great idea!

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11 months ago

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Fedaykin

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Australia, Canada and New Zealand are all independent countries with their own defence procurement policy and yards of their own to sustain.

They are not going to be interested into buying into a capability they neither want or need.

Australia already has two new Canbarra class built to their requirements, Canada has no established requirement for a Carrier and has enough problems with their current equipment program and the day New Zealand would never be interested in the idea.

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11 months ago

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Jonathan

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They are madly cheap for bleeding great aircraft carriers, the question is how is it we can build just about the cheapest large carrier you could ask for, but can’t build a competively priced glued together OPV.

Maybe we only really like building big ships.

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11 months ago

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Stephen

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British governments have waged a deliberate and organized war against Britain’s heavy industry for decades, and it must stop. It is not just shipbuilding, it is mining, steel making, car making, train making, aeroplane making, etc., etc., etc. They will not be happy until we have zero heavy industry left and we have to go cap in hand for everything to foreign companies. We are the ONLY major European country who has done this. This is not how we want our country run, Do you see France, Germany and Italy doing this? We are not doing this either. Those countries… Read more »

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Agree

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11 months ago

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Steve Taylor

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This ^

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11 months ago

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Willw

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Yep

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11 months ago

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sjb1968

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spot on

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11 months ago

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Cam Hunter

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Yeah exactly! The last deep coal mine closed recently! And it wasn’t losing money!… But now we buy coal from Poland! It’s a dam joke! And it’s to do with the dam environment and carbon emissions ect!!… But to ship coal from Poland when we IN THE UK have PROVEN COAL RESOURCES to last hundreds of years. FACT…

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11 months ago

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Darren

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Then don’t vote liblabconsnpplaid! Come fucking on!

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11 months ago

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Darren

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Apologies for the profanity.

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11 months ago

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Jonathan

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So very very yes…..

We need right, left and the centre of politics to get together and agree on one simple thing get shot of neoliberalism.

Most people don’t really get how invasive neoliberalism has been ( lab,con,libdem have all followed it since around 1990).

When you look at the brexit vote, Corbins popularity, and in the states with Donald Trump getting in, what people actually voted for was a rejections of neoliberalism ( Donald is anti neoliberalism right wing, Corbin the same on the left and the EU very much a champions neoliberalism)

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11 months ago

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Expat

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I’ve worked in engineering since the 70s the unions did a fair bit of damage also. I remember people saying Jap cars were rubbish back then. They didn’t understand the competition the consumer woke up and switched fed up with poor quality. During my apprenticeship there were several walkouts in one year. We were constantly delivering late and once back at work overtime was required to complete orders so costs went up. Eventually the business was moved to Germany were we were told productivity was higher and quality was better. Not saying management and government are blameless but there’s several… Read more »

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11 months ago

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Darren

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Yes. But sadly the Mercedes team, some people call German engineering. No, chassis and engine design and engineering are done in Britain, so too is the manufacturing.

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11 months ago

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Wads

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I would dearly wish that these ships would be built in the UK, but the critical question is who is going to build them? Not BAE, busy with T26, Astute and Dreadnought. Cammell Laird we assume will have the T31e. It has large dock at Greenock, but no metal fabrication, joinery, pipe shops etc. there would need massive investment. Appledore is way too small. A&P might at a push be able to do the job. BUT, building ships is expensive and risky, as the Koreans are now finding out, most of their yards are bust. Babcock’s recent results have shown… Read more »

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11 months ago

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dadsarmy

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Babcock at Rosyth – they’d like the work.

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11 months ago

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Darren

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The main final assembly and integration will and must be at Rosyth with Cammell Laird playing a very big part in this.

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11 months ago

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Ron

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Could these FSS ships be built in the UK in the time that they would be needed, i’m not sure. I think that Rosyth could handle the build with maybe Appledore and say Belfast handling some of the blocks. What could also be an idea is to discuss with Canada and Australia if they would lease this type of vessel then rather than 2 built +1 optional possibly five could be built with two or three being leased out. However it would be good for UK ship building industries if they were. Not only for the industry but also the… Read more »

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11 months ago

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Wads

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Babcock has no significant metal fabrication facilities at Rosyth, it is a dockyard not a shipyard. Likewise the shop at H&W in Belfast was closed after the RFA Bay fiasco. I also think Babcock are psychologically out of the ship fabrication business now.

Best bet would be to follow the Dutch, Norwegian model, get the basic hull fabricated abroad and then A&P or Cammells could fit it out.

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11 months ago

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Wads

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Apologies to H&W I was thinking of Swan Hunter when I made the above comment. Edit facility would be very good!

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11 months ago

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Darren

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South Korea did not build 4 tankers on time, yet you doubt the UK. Most delays are caused by people in suits.

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11 months ago

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Steve Taylor

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This ^

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11 months ago

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Steve Taylor

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Ignore that ^

The site needs a proper comment handling system.

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11 months ago

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Steve Taylor

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We follow rules that is why we don’t fit in the EU.

Build them here. And whatever number we have decided upon, buy one more.

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11 months ago

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Nigel Collins

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For the life of me I really don’t understand this… We have a NSS that was supposed to support British Industry. We are actually quite good at this. We have a requirement for circa 15-20 Large ships over the next 25 years. It could support our steel industries when put into the mix with Boxer, Ajax, T26, T31 its. We shouldn’t be ordering 3 – we should be committing to 1 every 18 months, but make these ships multi disciplinary like the Karel Doorman, which is much better than anything else doing the rounds. It really is just very depressing… Read more »

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11 months ago

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BB85

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The Karel Doorman isn’t cheap, but when you consider its flexibility it gives a lot of options especially for humanitarian relief etc. I have no idea why Germany did not go down this route when they are so humanitarian focuses these days. If all three incorporated hospital fascilities and no offensive weapon systems I don’t see why all three could not be funded from the Foreign Aid budget since they will be RFA ships. It’s a lot better than using it to bribe corrupt governments.

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11 months ago

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Pacman27

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The SSS aren’t going to be cheap either, and are comparable in cost to the KD’s. By having 13 Karel Doorman style ships we can merge our fleet support, Amphibious, Hospital/humanitarian and helicopter platforms into one. It may require a tweak or two to the design, but we already have a hull form (tide class / Aegir) and for me its better to have a platform that can always be used than have one parked up. Use these will S2S connectors, CB90’s, Atlas Mine countermeasures, Orcs… the list goes on. We may need to come up with a solution to… Read more »

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11 months ago

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Can Hunter

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We should build 4 minimum in sections and put them together in Rosyth, and fund 1 of them from the foreign Aid budget and turn it into a hospital ship, for humanitarian missions! or for any wars we are in… But it can easily be funded for life from the aid budget, fuck a fleet of 40 could be funded easily and still have billions a year left! 12/13 billion EVERY YEAR is far to much for foreign aid! We are cutting our millitary to pieces and moaning about the cost of the new Aircraft Carreirs!!… when our foreign aid… Read more »

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11 months ago

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Julian

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What’s the status of Golliath? I know it was scheduled to be sold but has that happened? Buyer identified but sale pending? Still up in the air?

It seems a pretty important issue to me. The sort of infrastructure that we shouldn’t be losing.

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11 months ago

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captain P Wash.

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Hello Julian, I believe that Golliath was a special case, not actually owned by the Builders but I can’t remember the actual details, all I know Is that It had to be offered for sale as part of the Initial Deal.

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11 months ago

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keithdwat

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sorry, Goliath?? the crane in Belfast??

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11 months ago

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Steve

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This is why we need a decent increase in defence expenditure, particularly for the Royal Navy. Stronger navy = stronger shipbuilding industry = stronger steel industry = thousands of more people in work (either manning the ships, building them or forging the steel to do so) = stronger country. Thousands more jobs would be created and the bigger our shipbuilding industry is, the more ships we can build and the faster we can build them, the more exports we get, which means billions more going into the UK economy. It would be a win-win. Long as we build them here… Read more »

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11 months ago

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Sleepy

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By the UN definition an RFA is NOT a warship as the Captain is not a Commissioned Officer and the crew do not come under regular armed forces discipline, so maybe the government has a point.

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11 months ago

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Sleepy

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Using the UN definition of a warship then a RFA is not one as the Captain is not a Commissioned Officer and the crew do not come under regular naval discipline.

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11 months ago

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captain P Wash.

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I strongly believe that a big part of the Problem and probably successive Governments thinking, was that out large Industrial Manufacturing Base was at the mercy of more competitive workforces from overseas and the home grown Strike Culture of the 60’s, 70’s and 80’s. Maggie took a stand against all that, Like It or not. Personally, I’d love to see Us get back to being a Manufacturing Powerhouse where “Made in Great Britain” actually means something again. Type 26 Is a great start and I have High hopes for Tempest too, building these Ships In the UK can only be… Read more »

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11 months ago

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Steve Taylor

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The UK is still a top ten manufacturer and world leader in engineering. It’s just most of the stuff we make isn’t domestic so ‘Made in UK’ isn’t seen that much.

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11 months ago

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Steve

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I’d like to think, or hope at least, that that strike culture has gone now. As technology has moved on much more of the work is skilled and specialised, so therefore better pay and better conditions. Again, owing to technology but also health and safety and general working practices these days which weren’t prevalent then. I also think that’s need to massively boost our manufacturing industry. If all the car makers for example up sticks after Brexit we need to fill the void Rather than attracting another foreign company it could be an opportunity for a smaller UK car company… Read more »

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11 months ago

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Pacman27

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unfortunately whilst the strike culture may have gone from most regions, its clear that pride and quality of work isn’t a key trait for many. You just have to look at the superglued bolts on our latest OPV’s and some of the comments made on these forums about working practices up on the Clyde. Amazingly the people and communities that are wholly dependant upon foreign investment (Sunderland Nissan area for instance) voted to leave the EU. I watched the news where one worker believed Nissan was too big to fail and the government will bail them out. Again a throwback… Read more »

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11 months ago

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captain P Wash.

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Pacman, I’m of the opinion that, “People really are Thick “. But I blame the culture that they have been brought up In. The Greatest problem at the moment is Social Media, Everyone has been given a Platform to Spout off to all their “Friends”, Everyone Is a Closet politician and Everyone Is now Offended. There Is a Name for them now, It’s well known in Legal circles. “New World Victims”, They’re everywhere, New World Victims are Young, Dumb and completely oblivious to real world Trauma and Suffering. They are the product of a previous generations sacrifice, They are totally… Read more »

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11 months ago

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Steve Taylor

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I am triggered now.

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11 months ago

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Daniele Mandelli

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Well said Capn.

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11 months ago

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Evan P

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And the cycle of literally every generation complaining about the generation younger than them continues. This site you are on now comes under social media which means that you’re complaining about other people complaining to their friends on social media, on social media. You appear to be offended by people being offended. Who is worse, the person whinging or the person whinging about people whinging? I’ve made my point.

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11 months ago

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Simon

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The blame for this for me lands squarely at the short sighted treasury the power wielded by no 11 is now ridiculous. I can understand it especially because of austerity but it needs to change. The policy of the uk is to get involved and engage across the world and MOD have to deliver this. The mod probably would have no problem building these in uk and in some ways would probably prefer it. but the budget doesn’t match the policy requirements as well as supporting uk industry, so where it can it needs to buy from the cheapest source… Read more »

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11 months ago

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captain P Wash.

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I think he’d make an excellent PM. He’s shown he truly cares about defence; how many other ministers can truly say that about their own respective departments.

Either Williamson for PM or myself :-p

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11 months ago

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captain P Wash.

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Steve, I’ll vote for you too !

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11 months ago

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Steve

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If I were in charge I’d definitely have defence spending increased to 3%.

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11 months ago

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Aaron J.

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I agree with the Scottish perspective on ship construction I believe all future military and support ships should be constructed within the United Kingdom, this maintains the local economies as well as returns funding to the government in the form of income tax. I personal like the Australian model for the Hunter-Class (T26) which they have appeared to have introduce; buy a foreign design and adapt the design for their operation and construct it locally. This method could be used in the UK for the Royal Navy, foreign companies could be invited to work of Royal Navy projects on the… Read more »

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11 months ago

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Pacman27

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Whilst slightly off topic, I do believe that the Police also need a massive increase in funding and resourcing. The UK needs to make the NCA 20 times larger than it is now (at least 40k strong) and give them the tools to go after organised crime across the whole of the Uk Our constabularies should concentrate on community policing and intelligence gathering for the NCA and need a 20% increase in budget. The budget for the UK polic force and judiciary is less than our foreign aid budget, and we are starting to lose control of our streets. I… Read more »

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11 months ago

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Steve

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I agree with giving foreign aid but having that budget be bigger than our national police budget is absurd. I’d say reduce the scope of the foreign aid budget to those countries truly in need. Forgive their debts to us as they’ll never pay them back anyway, and focus on free trade with them that could benefit us both. The cuts to the police service do need to be reversed. The rationale behind it at the time was that crime was so low. The reason crime was so low was because of the police. Police and military keep our country… Read more »

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11 months ago

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Steve

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That is the one and only thing I will ever agree with him on. As I said, the man is a joke!

And I’d use the money raised on NHS, defence and the police. If it raised, say, £40billion, then…

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Steve corporation tax is a small contributon and what you have to decide is do you want more companies coming to the uk attracted by low tax or less companies but a higher rate. But less companies means fewer employees = less income tax and less people spending so less vat. Companies typically report larger profits in low tax countries so in many respects a low rate can improve tax takings. I call myself Expat as I’ve worked overseas for parts of my career and it’s clear to me there are countries which actively try to convince UK companies to… Read more »

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11 months ago

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Sjb1968

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The sentiment I understand but the UKs budget deficit is around £40bn so how about slowly paying down the national debt first because that helps in the long term. Any increase in spending to any Government department should only be gradual to avoid typical public sector waste and what about education? The police would only get more money if it was spent on real crime and not on hate crime that is largely only in the mind of those professional offended types or historical investigations that seem to only focus on celebrities. Try and get an investigation into killing 450… Read more »

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11 months ago

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captain P Wash.

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You’re right mate. The Elite are Ever so Privileged, They get Millions In compensation If Wronged whereas the rest of us just have to Suck It Up. Boils the Shite out of my Piss, truth be Known.

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11 months ago

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Pacman27

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Steve, the funding gap for the military is not as large as most people think. An extra £10bn pa would be more than enough to modernise equipment, force structure and improve infrastrusture and welfare services. But it needs to be a rebaseline that is then updated at inflation x2 each year. The police and security services probably need £5bn and the rest could go wherever needed (3 free school meals per day is where I would put it). But ultimately the NHS needs to sort itself out as do the other depts, but I do think the MOD and Police… Read more »

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11 months ago

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captain P Wash.

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Pacman, mate, 3 Free School Meals a day ? Sorry Mate but, If I couldn’t afford to have Children, I’d not Make them In the first place, Unlike the Millions who Work the System at the Tax Payers expense. It’s all part of the problem In this Country In my Opinion.

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11 months ago

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Pacman27

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I dont disagree, but its not the kids fault and its really not good that anyone is going hungry in our country. The MOD needs a budget of circa £45bn, or £8bn more to really see it getting onto a proper footing, anything more than this is beneficial, but not necessary. The military needs to grow by 20% in terms of staff, but also needs to rationalise its basing and equipment / platforms as well as getting critical mass in many areas where we are currently under (Escorts, F35, P8’s spring to mind straight away). But we need to recognise… Read more »

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11 months ago

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captain P Wash.

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Agreed, It’s not the Kids fault. Just the Parents. But it’s just so easy to have Kids and Expect everyone else to support then. Any Intelligent person would try to provide an Ideal Environment for their offspring truth be known. Another sad fact of life In this Benefit Rich Country.

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11 months ago

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Steve

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I wouldn’t do 3 school meals a day; they’re generally only in school from 8:30 to 3 or so. Breakfast and lunch I could understand at a push, but dinner would be after school hours and another expense. If parents can’t afford to provide even one meal per day then they shouldn’t be parents.

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11 months ago

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Jonathan

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The simple fact is an open procurement only Generally takes into account the base cost, quality and standard requirements, you can’t include offsets such as tax revenue generated, jobs created etc. It’s a failing that neoliberal political dogma has never been able to square (be you right, left, centralist etc I would suggest a good think around how distructive neoliberalism has been to our country vs multinational companies and superrich, but of which have no national ties). The simple fact is British shipbuilding could be far more expensive ( and I mean a lot) but it would still be cheaper… Read more »

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11 months ago

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Darren

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Meanwhile, we can add 60 million to that 2016 1 billion price pounds (Nett?) for the three ships.